New York Boss Named Unindicted Co-Conspirator in Mob Investment Case

Thomas J. Scotto, the president of the N.Y.C. police detectives union has been named as an unindicted co-conspirator in what federal prosecutors say was an organized-crime scheme to use kickbacks to union leaders and mob threats and violence to tap pension funds, inflate stock values and defraud thousands of investors. Scotto, who has led the Detectives Endowment Ass’n since 1986, was named by prosecutors in papers filed in U.S. Dist. Court in Manhattan recently to supplement information in 16 indictments that brought charges against 120 people in Jun. 2000 in a wide conspiracy.

The papers, filed to give the defendants and their lawyers details of the government’s case so they can prepare their defenses for a trial scheduled to start in Sept., outlined a conspiracy in which stockbrokers, mobsters and others schemed to bribe union bosses to invest pension funds in stocks whose values would thereby be driven up and then sold at a profit. While Scotto and bosses of several other unions were described as co-conspirators, the papers did not accuse them of taking any bribes or even of being approached with bribe offers. The papers, which were filed Feb. 5 and came to light Mar. 26, noted pointedly that Scotto and the others “may or may not have known they were targeted as bribe recipients.”

Typically, people named as unindicted co-conspirators have become targets of an investigation that has produced some evidence against them but not enough to bring charges. They are cited in the pretrial record because their names, and descriptions of their purported roles, are likely to come out at a trial.

Philip Karasyk, Scotto’s attorney, called the government’s identification of his client as an unindicted co-conspirator “baseless and unsupportable.” He said the identification apparently stemmed from two taped conversations made by a government informant in which Scotto’s name was mentioned. Scotto was not present, nor was his voice heard on the recording, Karasyk said. In one, he said, Stephen E. Gardell, a retired police detective who served as treasurer of the DEA until his indictment in the case in, was said to have commented that Scotto liked the idea of the stock scheme. In the second tape, James S. Labate, a reputed associate of the Gambino organized crime family, was said to have made a similar remark. [N.Y. Times 3/27/01]